Biggest thing killing dive shops?

[tursiops]

PADI used to tell its newly minted instructors there arere Three E's in the dive business: Equipment, Education, and Experiences. Now they've added Eco as a fourth E. Their point was that you had to design a business strategy that blended your income from these four sources, and not try and win big on all of them. The shops seemed to mostly try and win big on selling Equipment and servicing it, almost giving away the Education to get people in the door (aided by too many instructors mostly earning their living elsewhere and willing to teach for almost nothing in order to get free air and equipment discounts), and doing only as much Experience provision (travel, social events, pool mornings, fleamarkets, etc) as time allowed. The web killed the Equipment E; Education is doing fine but no one is making any money on it; and Experience is left as the only place to make any money. The web has not helped there, either; individuals can see what the trip actually costs, and the shop can only arrange a 10-15% commission on the trips they put together, with big losses possible if no one buys in. If a shop wants to make $500,000 a year from its travel business, it has to sell $5M worth of trips...that's like sending 5000 people a year to Bonaire and telling them they can arrange their own airfare. That's 100 people/week; set up a deal with Buddy Dive, and guarantee 100 people a week; your commission will greatly improve!

What to do? Develop a reputation about your Education so you can charge a bit more for it....slowly increase that over the years, as your gap widens between you, the Great shop, and the other guys who are giving it away.

Shift the Equipment money-stream from selling to showing. Consider the Showroom model that is developing in other sectors: you show lots of equipment on your floor, but you do not sell anything. It is only for people to touch and feel and ask questions about. They they can go buy it elsewhere. You make your money by charging the manufacturers for your space and expertise in describing the gear. Maybe they can even try it out in "your" pool. It doesn't have to be new; you are not going to sell it. When a model has been discontinued, it goes on clearance by some selling shop, or is given away in a lottery, or becomes a door prize.

 

[markmud]

But this just reinforces my opinion. I tell the dive shop I'm on a budget and even express my opinion about 2 other shops immediately offering me $750 set-ups and they IMMEDIATELY offer me a $700 set-up after telling me I'm right I don't need a $750 set.

Instead of trying to make a bunch of money from a customer all at one, make SOME money from them upfront so they'll come back and you can make more off of them over the long run (on extras, service, trips, etc.).

Hi Scuba-Blue,

I have an Oceanic low-end regulator that I use on my pony bottle. At 100 feet it breathes easy and is reliable. It is rugged and simple. I was sold a Mares set-up when I started diving because that is what the shop owner needed to sell in order to decrease his inventory. It was crap. The first stage cracked and the second stages chattered.

As a primary first stage, my Oceanic SP is a workhorse and probably good enough for all of the diving I have done.

2airishuman is, for the most part correct, when he says that the cheap stuff really isn't cheap.

thanks,
markm

 

[ljpm]

From the perspective of the Local Dive Shop, there's nothing more irritating than spending the time fitting a potential customer with a full "authorized dealer" package (wetsuit or drysuit, BCD, regulator etc) in stock, only to have that customer later purchase the whole ensemble online cheaper through an Internet sales store, or piece together through eBay.

If you can maintain and/or repair the gear yourself, then good for you. If you can't, or need special parts, then don't expect the authorized dealer LDS to offer any labor/parts discount or expedite service for you --the money you saved is the premium you will pay the LDS for their time, expertise and support of gear you decided to buy online instead. . .

Exactly why LDS's are dying. Basically telling a customer to F#$^ off for buying on line. I got news for you, LDS's need customers more than customers need them. I purchased full gear, top of the line (aqualung), for my wife and myself from my LDS. I don't have the complete figures but must be over $8,000 cdn. When my daughter started diving I didn't want to have to keep buying new gear as she grew so I found a 'gently used' reg set and BCD on line. I took them to my LDS for service. Close to $400 and the only replacement part was a service kit. When my son started diving I found another reg set on line. This time I chose a different LDS and was charged $30 to test it. Can you guess where I have been buying all my gear and having all my service done now, even though it is an additional 20 minute drive?

Another issue I have has been with information. When I was new to diving I had no clue even what to ask. I tried to get information from the first LDS and was basically told to buy this. The second LDS actually will help provide information so that I can formulate a question and then make my own decisions. I feel a lot more comfortable shopping in the second LDS.

 

[divinh]

(I haven't read through all 36 pages, so sorry if this has been pointed out...)

I went to the local dive shop to ask them if they had a service where I could test out my equipment in their pool and they didn't have one. They suggested that I might take a refresher course. It's certainly an option, to get pool time, but doesn't exactly suit the purpose that I want, which is to put my gear through its paces. I am willing to pay for the pool time but they didn't really have something in place. It seems like a service like this would be beneficial since they could capture business from people buying online and people wanting to test gear before a big trip. They wouldn't need an instructor on-hand, just someone to make sure no one doesn't anything stupid/dangerous. In the end, they said they would come up with a price and the only restriction they would have is that I come early in the morning, before their classes start.

 

[markmud]

PADI used to tell its newly minted instructors there arere Three E's in the dive business: Equipment, Education, and Experiences. Now they've added Eco as a fourth E. Their point was that you had to design a business strategy that blended your income from these four sources, and not try and win big on all of them. The shops seemed to mostly try and win big on selling Equipment and servicing it, almost giving away the Education to get people in the door (aided by too many instructors mostly earning their living elsewhere and willing to teach for almost nothing in order to get free air and equipment discounts), and doing only as much Experience provision (travel, social events, pool mornings, fleamarkets, etc) as time allowed. The web killed the Equipment E; Education is doing fine but no one is making any money on it; and Experience is left as the only place to make any money. The web has not helped there, either; individuals can see what the trip actually costs, and the shop can only arrange a 10-15% commission on the trips they put together, with big losses possible if no one buys in. If a shop wants to make $500,000 a year from its travel business, it has to sell $5M worth of trips...that's like sending 5000 people a year to Bonaire and telling them they can arrange their own airfare. That's 100 people/week; set up a deal with Buddy Dive, and guarantee 100 people a week; your commission will greatly improve!

What to do? Develop a reputation about your Education so you can charge a bit more for it....slowly increase that over the years, as your gap widens between you, the Great shop, and the other guys who are giving it away.

Shift the Equipment money-stream from selling to showing. Consider the Showroom model that is developing in other sectors: you show lots of equipment on your floor, but you do not sell anything. It is only for people to touch and feel and ask questions about. They they can go buy it elsewhere. You make your money by charging the manufacturers for your space and expertise in describing the gear. Maybe they can even try it out in "your" pool. It doesn't have to be new; you are not going to sell it. When a model has been discontinued, it goes on clearance by some selling shop, or is given away in a lottery, or becomes a door prize.

Hi tursiops,

In the boat business, we got back-end-kick-backs. The kick-back was related to our volume.

Here is a twist for your business model. Could your showroom direct, or aid the customer, in ordering direct from the manufacturer with your payback being a back-end payment based on your yearly volume?

just a thought...

markm

 

[Tassi Devil Diver]

The most successful bricks and mortar dive shops I see are the ones that also service commercial industries, to win commercial contracts one usually has to be a bit more organized and professional this flows on to the service of regular divers with a greater range of expertise and experience within the shop.

 

[gcarter]

Exactly why LDS's are dying. Basically telling a customer to F#$^ off for buying on line. I got news for you, LDS's need customers more than customers need them. I purchased full gear, top of the line (aqualung), for my wife and myself from my LDS. I don't have the complete figures but must be over $8,000 cdn. When my daughter started diving I didn't want to have to keep buying new gear as she grew so I found a 'gently used' reg set and BCD on line. I took them to my LDS for service. Close to $400 and the only replacement part was a service kit. When my son started diving I found another reg set on line. This time I chose a different LDS and was charged $30 to test it. Can you guess where I have been buying all my gear and having all my service done now, even though it is an additional 20 minute drive?

Another issue I have has been with information. When I was new to diving I had no clue even what to ask. I tried to get information from the first LDS and was basically told to buy this. The second LDS actually will help provide information so that I can formulate a question and then make my own decisions. I feel a lot more comfortable shopping in the second LDS.

It took me zero time to guess what the first LDS is. I refuse to use them.

 

[Eric Sedletzky]

The most successful bricks and mortar dive shops I see are the ones that also service commercial industries, to win commercial contracts one usually has to be a bit more organized and professional this flows on to the service of regular divers with a greater range of expertise and experience within the shop.

That’s great, if the dive shop is in an area with a lot of commercial, military, or law enforcement diving like Los Angeles or San Diego. But many or most shops aren’t in an area with such a gold mine. I know ours isn’t, we have none of that up here.

 

[blue steal]

Bump so I can follow this thread, so far made it to page 10. I dive with a group every Sunday locally here in Southern CA, shore diving, but once a month or go out on a charter day trip to Catalina Island.

 

[KenGordon]

Edit: my wife and I organize training for ourselves, book diving trips and buy gear. We can call ourselves "Our Own Sub-Aqua Club", I'm not quite seeing how that would make us a viable alternative to the plight of the US dive shops. Nor how my "OOSAC Level Max" certification would be recognized by any dive op.

If there were 30k of you and you had been running your training for sixty years would that help?

People organising for themselves can do what is needed with fills and other local services. Near the coast it is common for BSAC clubs to have their own compressor etc.

Personally I would much rather our LDS continues in business. If my twinset falls over and I break a plastic elbow how much use will an online shop be if I need to go diving tomorrow?